Here are the collection of tutorials which help you to kickstart, understand the basic building blocks, improves your understanding about Market Profile and helps you to organize the market generated information in a better way than any other trader.
Market Profile is not a trading system but a market generated information and a decision support system along with your existing trading systems. It provides you knowledge about who is in control in the market (Long Term Players, Short Term Players, Day Traders), directional conviction. Market Profile gives an idea to a day trader about where to take a trade and which market trend to play for the day based on trend conviction.
In this section we will cover different types of markets (Balanced Markets and Imbalanced Markets) and provide a fair idea when such days occur and who is in control for the day.
Market Profile : Different Types of Profile Days
In this tutorial we will be discussing about the different types of Market Profile Days. By analyzing the shape of profile one can easily identify who is in control in the market and the conviction among market participant.
How to Play 80 Percentage Rule
Market Profile – 80% rule which was first mentioned in The Profile Reports (Dalton Capital Management 1987 – 1991). It says if the market opens either above or below the value area and test the value area high/low within 2 consecutive 30 minutes
Reading the profile right from the market day open gives more confidence to a day trader towards trade conviction. The confidence level of the Other timeframe trader (Long Term or Positional trader) can be analyzed through the market opening.
By observing Spike action in the market and the next day’s follow-through price action one can determine whether the previous day’s spike action is a false move to confuse the traders or it is going to create a sustainable trend towards the spike direction.
Failed Auction is a Market Profile Pattern brought to the world by Ray Barros of Trading Sucess. Failed Auction provides trader a great opportunity to trade with a dynamic mindset and constructing his/her trading rules accordingly
Poor low and Poor High are market profile structure which generally indicates a market that is too long or too short and the shorter timeframe players in the market has low confidence about the current market direction
Market Profile – Excess (End of Auction)
Excess generally indicates the end of the auction and the start of another. Generally, Excess is seen in the extremes of the profile with strong pullback as shown below. Excess occurs across various timeframes (Hourly, Daily, Weekly Charts)